Time for a Nancy Pelosi ETF?

Nancy Pelosi, Speaker of the United States House of Representative, was a social media superstar in 2021, not for her political stance or her epic anti-Trump rants, but for rising through the ranks of great investors — to become the new "Queen of Stonks". 

What's that all about?

Long story short, Nancy Pelosi has been on a tear with her stock-picking skills. According to data compiled from official financial disclosure reports, the 81-year-old Congresswoman and her husband Paul have been making winning trades that put the market on its heels. The news spread like wildfire among TikTokers, Fintwit, and the Reddit people — who caught on to the idea of tracking financial disclosures of Pelosi and other sitting members of Congress — a newly found "crystal ball" for stock tips.

Are U.S. Congress members even allowed to trade?

You bet they can but — they must show and tell. During President Obama days in 2012, lawmakers passed the "Stock Act", short for “Stop Trading on Congressional Knowledge Act” (cool acronym, right ?!). It forbids members of Congress and staffers from trading on confidential information they learn on the job. It also requires them to report all trades within 45 days. Yet, many members of Congress have not fully complied with the law — offering excuses like "we didn't know" or blaming clerical errors and accounting mistakes. 

Where you can find the trades

The best way to track U.S. politician trades is to go directly to the House's official financial disclosure section on clerk.house.gov. The report includes information about the source, type, amount, or value of the incomes of Members, officers, certain employees of the U.S. House of Representatives and related offices, and candidates for the U.S. House of Representatives. You can also check members' periodic transaction reports. It highlights the assets in play, transaction date and type, notification date, and the amount.

Another way to follow the money is to go on websites of enthusiasts who do the dirty work for you. They took it upon themselves to provide traders around the world with insights on the "Government Stock Portfolio" — compiling all the transactions in the form of charts, tables, and cool dashboards — that you can easily filter and play with. 

Here are some of the most visited ones:

• Senate Stock Watcher: tracks U.S Senators' daily transactions
• House Stock Watcher: tracks U.S. House Representative daily transactions
• Smart Insider: tracks U.S. Politician stock trading

Tracking the Queen, Nancy Pelosi 

Now we get to the fun part. Christopher Josephs, the co-founder of Iris, a social investing app that shows other people's stock trades — has been taking advantage of the "Stock Act" for the past year and a half, and managed to replicate Nancy Pelosi's portfolio for the masses. The portfolio called "The Gov Portfolio", is followed by more than 60,000 users. It allows them — according to its description — to see the current, as publicly known, holdings of the Pelosi couple as filed on the U.S. House of Representative Clerk website (the aforementioned clerk.house.gov).

Based on the end-of-year data, the portfolio racked up over +40% in total returns in 2021 — beating the S&P 500 (+28.7%) and the Nasdaq 100 (+26.6%). Readers should note that the actual returns of this portfolio do not reflect the real returns of Pelosi's actual portfolio.

So, what is made of?

Nancy Pelosi's secret sauce ingredients

Based on December 28th data shown on Iris app, the Nancy Pelosi portfolio has the following holdings:

1. Tesla (TSLA, 17%): American company, ran by high profile billionaire Elon Musk — designs and manufactures electric cars, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. Tesla shares gained +50% this year, riding the company's improved financials and positive outlook. Company shares popped in November to a record high after Hertz, an American car rental company — announced it will buy 100,000 Teslas to electrify its rental fleet.
2. Apple (AAPL, 16%): American tech giant Apple is the world's most valuable company by market capitalization ($2.89 trillion) and the second-largest mobile phone manufacturer. The company also specializes in other consumer electronics, computer software, and online services. Apple shares returned +35% this year after beating earnings estimates and reportedly pursuing to rival Tesla with a high-tech electric car of its own.
3. AllianceBernstein (AB, 13%): American Global asset management firm providing investment management and research services worldwide to institutional, high-net-worth, and retail investors. AB shares rose 45% this year following a sectorial rotation into financials. Investors injected capital into the firm, adding more arsenal to fuel the company's revenues and earnings.  
4. Nvidia (NVDA, 11%): American graphics processing units' manufacturer for the gaming and professional markets, as well as systems-on-a-chip units for the mobile computing and automotive market. Company shares jumped 125% in 2021 following a global semiconductor shortage that crippled entire industries.
5. CrowdStrike (CRWD, 9%): CrowdStrike is one of several cybersecurity firms that flourished this year in midst of increased remote work and digital adoption. The U.S. Government was an endorser of the industry, approving $1 billion of cybersecurity funding as part of a $1.2 trillion infrastructure package. In November, CRWD shares rose to an all-time high, then fell back to earth overvaluation concerns — ending the year with a -3% dip.
6. Roblox (RBLX, 9%): Roblox is an American online game platform and game creation system developed by Roblox Corporation. It allows users to program games and play games created by other users. The platform became popular among the youngsters during COVID-induced lockdowns and remains a solid choice for investors after positive quarterly financial updates. Roblox capped 2021 with +54% gains.
7. Microsoft (MSFT, 7%): Almost omnipresent in every aspect of our lives, the company remains one the best tech companies in the world. Under the leadership of Satya Nadella, the tech giant shares ended the year with +51% gains after tapping into several growth opportunities.
8. Walt Disney (DIS, 7%): Disney remains very fragile to COVID-19 and its variants, dipping -15% in 2021 on Omicron worries. However, could be the headline of a fairytale comeback story when its core businesses return to normal.
9. Amazon.com (AMZN, 6%): The E-commerce giant disappointed investors in 2021 with unimpressive gains of only around 2%. The lackluster performance comes after a year of supply chain disruptions and a slowdown in the growth pace of the e-commerce business.
10. Alphabet (GOOGL, 5%): Alphabet wrapped up one of its best years from an investment perspective since 2009 and has proven to be by far the top-performing Big Tech stock of 2021. The company showed resilience against COVID-19 and inflation concerns as consumers continued to flock in greater numbers to web and mobile search, maps, and YouTube videos, and its popular cloud infrastructure.  GOOGL shares ended 2021 with a +65% price jump.

Investing $10,000 in a Nancy Pelosi ETF 

No, a Nancy Pelosi ETF does not exist, but after witnessing some of the weirdest ETF launches in 2021, we don't see why ETF issuers can't surprise us with one in 2022. 

To get a preview of this fictional ETF, we reconstructed Pelosi's portfolio using an online portfolio allocation tool, then compared it with the flagship SPDR S&P 500 ETF Trust (SPY) and a Republican-friendly ETF called MAGA, for the sake of irony.

Here are the criteria of the study:

• Portfolio Name: Nancy Pelosi ETF ($NANCY)
• Initial Amount: $10,000
• Start Date: March 31st, 2021 (Roblox data weren't available before that)
• End Date:  December 31st, 2021, 5:00 PM GMT+1
• Assets: As highlighted in the secret sauce
• Cashflows: None
• Rebalancing: Annually
• Leverage Type: None
• Reinvest Dividends: Yes
• Benchmark 1: SPDR S&P 500 ETF Trust (SPY)
• Benchmark 2: Point Bridge GOP Stock Tracker ETF (MAGA)

Source: Trackinsight

The results: something fishy going on?

From March 31st to December 31st, 2021, the Nancy Pelosi ETF came out on top (+45%), beating the SPDR S&P 500 ETF (SPY, +21%) and the Point Bridge GOP Stock Tracker ETF (MAGA, +15%). As expected, Nvidia, Tesla and Apple were the top contributors for this stellar performance.